There are many reasons why benefits claimants may need additional amounts even after they claim Universal Credit. The purpose of this blog post is to refer to the advance payment loophole of Universal Credit by answering the question ‘Can you get £1,500 advance payment due to the Universal Credit loophole?’ We will also explore other options of advance payments for individuals on low income and claiming Universal Credit as well as discuss whether these payments are to be returned to the DWP. 

Can You Get £1,500 Advance Payment Due To The Universal Credit Loophole?

No, you cannot get a £1,500 advance payment due to the Universal Credit loophole. During the pandemic when a large number of households were low on income, a lot of them were able to claim an advance payment of £1,500, on three separate occasions from the Department of Work and Pensions as part of a Universal Credit claim.

However, many of these families were not eligible for Universal Credit and were only able to receive payments due to a technical error in the online system for Universal Credit claims.

How it started was when some fraudsters, falsely claiming to be DWP employees or financial advisers, started contacting individuals and asked them to share their details for a Universal Credit application. Claims were filed using the credentials of these individuals and the fraudsters took £500 (or more in some cases) from each claim of £1,500.

Among those who received payments also were some individuals who made claims knowing that they were not eligible for Universal Credit and were only able to claim the advance payment due to an error in the application procedure.

Since this was an advance payment and the claimants’ details were registered with the DWP, the fraudsters gathered a huge sum of money without the responsibility of paying it back; while claimants would bear the expense of returning the amount to the DWP.

The glitch in the system as well as the fraudulent activity were caught by the DWP. They issued a warning to claimants to alert those who had been part of the misappropriation of funds. Since then, the Department for Work and Pensions has set up specialist teams to tackle fraudulent claims; online or otherwise.

It is pertinent to note for benefit claimants that the best way to avoid scammers is by being aware of two things:

  • scammers will ask for your details and apply for benefits on your behalf while claimants are supposed to apply on their own;
  • scammers will ask for a fee for their services which is not the case if an actual JobCentre Plus employee would contact you

If a claimant is suspected to take active part in a benefit fraud, the DWP will execute a thorough investigation of the matter; which includes interviews of claimants. When someone is found guilty of the act, they will be asked to return the overpaid amount, they may be taken to court and could be fined between £350 and £5,000, their benefits can be reduced or completely stopped for upto 3 years.

Who Can Get Advance Payment From Universal Credit?

You can get advance payment for Universal Credit if you meet the below qualifying conditions:

  • your eligibility for Universal Credit is confirmed by the DWP but you are waiting for your first payment; or
  • you have recently had a change in circumstances and you are expecting an increase in your Universal Credit payments

This usually happens when claimants are unable to afford their living expenses during the five-week period that it takes for the first Universal Credit payment to be received by them.

You can apply for an advance payment on your Universal Credit claim in either of the following ways:

  • speaking to your Jobcentre Plus work coach
  • applying through your online UC account
  • calling the Universal Credit helpline

When you place your request to the DWP, they will ask you for the following:

  • your identification details
  • reasons for requesting an advance payment
  • your bank account details for the payment to be transferred

You will be told the same day by the DWP whether or not your request for advance payment has been accepted.

In addition to an advance payment, you can get help from Universal Credit in the following ways:

  • Discretionary Housing Fund
  • Hardship Payment
  • Alternative Payment Arrangements
  • Budgeting Advance

Do You Have To Give Money Back To Universal Credit?

Yes, when you take an advance on your Universal Credit payment, you will have to give money back; especially if you are in debt. This includes the following situations:

  • You need to repay an advance on your Universal Credit payment. Advance Payment on Universal Credit is an interest-free loan requested by claimants from the DWP while they await their first monthly assessment and Universal Credit claim to be paid. It is also applicable when the amount that an individual claimed earlier is about to change due to a change in circumstances. 
  • You have an overpayment of your Universal Credit claim. If a claimant has received an excess amount as part of their claim, they owe this amount to the DWP and will be required to return the additional amount; usually through reduced future payments.
  • You have overpaid benefits such as Tax Benefit or Housing Benefit. If a claimant has overpaid amounts from other benefit claims, Universal Credit can reduce their payment to them to adjust the additional amount. 
  • You are returning a hardship payment taken due to a sanction on your Universal Credit account. If someone has been sanctioned by the DWP and will not be receiving their benefits claim or will be receiving a reduced amount temporarily, they can ask for hardship payment from the authorities. This is a repayable amount that must be returned as per the mutually agreed on due date and schedule of instalments.
  • You need to repay a budgeting loan that aims to help claimants manage everyday living costs or even travel costs incurred for commuting within the UK.
  • There are third-party deductions to be made; such as payments for utilities, Council Tax, child maintenance, rent, service charges or court fines. 

Conclusion:

The above discussion brings us to the conclusion that while the £1,500 advance payment may longer be available due to its fraudulent nature, deserving claimants can apply for an advance payment on their Universal Credit claim through other means to get financial support in addition to their benefit claim.

FAQs: Can You Get £1500 Advance Payment Due To The Universal Credit Loophole? 

Can I get emergency money from Universal Credit?

Yes, you can get emergency money from Universal Credit in the form of an interest-free loan termed a hardship payment. This is usually extended to benefits claimants who are temporarily sanctioned from Universal Credit payments; either due to a penalty or benefits fraud.

 

Can I get a Universal Credit advance if I already have one?

If you are facing financial hardship, you can ask for a second advance on your Universal Credit claim. This is more common in cases where the claimant has not taken a full month’s payment as their first advance and still has some amount remaining.

What can I get free on Universal Credit?

If you are on Universal Credit, you can claim free prescriptions, dental treatment, eye tests, discounted glasses, free school transport and meals, as well as discounted childcare costs.

What is a hardship payment on Universal Credit?

If you have faced a benefits sanction due to any reason, you will not receive benefits payments or reduced payments for some time. During this period, you can be provided with a basic amount to pay for food and living expenses. This is a hardship payment.

How much money can you have in the bank on Universal Credit?

If you and your partner (in the case of a joint claim) have equal to or less than £6,000 in savings, you can continue to claim Universal Credit. The amount of your benefit claim will decrease as your savings increase and if you have more than £16,000 as savings, you will not be able to claim Universal Credit.

References:

Universal Credit £1500 cash boost loophole – DWP issues warning to fraudsters – Birmingham Live (birminghammail.co.uk)

DWP issues warning to fraudsters after £1,500 Universal Credit loophole – Bristol Live (bristolpost.co.uk)

Find out about money taken off your Universal Credit payment – GOV.UK